BASF may join hands with BYD to build a new materials factory!

German chemicals giant BASF is reportedly considering a lithium processing project in Chile, as European authorities and manufacturers look to strengthen ties with key battery metal suppliers in the energy transition. BASF is exploring the possibility of building a plant that would convert lithium from Chilean salt flats into cathode material needed for electric vehicle batteries, according to people familiar with the matter.

It is reported that BASF recently signed an agreement with Canadian explorer Wealth Minerals Ltd., which will include the offtake of lithium.If the project goes ahead, BASF will build a cathode factory in Chile together with Chinese companies BYD and Tsingshan Holding Group.

The third "Belt and Road" International Cooperation Summit Forum concluded in Beijing a few days ago. Chilean President Boric, who attended the forum, issued a statement through the website of the Chilean Presidential Palace, announcing that Tsingshan Holding Group will invest US$233.2 million to build a factory in Chile.

On October 16, Boric discussed the specific matters of investing in and building a factory with Xiang Guangda, chairman of the board of directors of Qingshan Industrial. Chile is one of the world's largest lithium resource reserves and exporters. Tsingshan Holdings will rely on local resource advantages to build a lithium iron phosphate cathode material factory in the Antofagasta region of northern Chile, with a maximum annual production capacity of 120,000 tons. It is expected to be put into operation in May 2025 and will create 668 jobs, 90% of which will be Chilean workers.

According to news on April 25, BYD previously announced on its official Weibo that it had reached an agreement with the Chilean Production Promotion Council on the production of lithium battery materials and obtained the production qualification and factory construction license for lithium iron phosphate cathode materials in Chile.

According to the agreement, BYD will be able to obtain the supply of raw materials produced by the Chilean Mining and Chemical Group at advantageous prices. By 2030, the supply can reach 11,244 tons per year.

In addition, BYD has also obtained a license to build a lithium battery cathode material factory in the Antofagasta region of northern Chile. The plant has a planned annual output of 50,000 tons, a total investment of more than US$290 million, and is scheduled to officially start operations at the end of 2025.

In fact, BYD’s first pure electric bus entered Santiago, Chile in 2017. In December 2022, BYD announced a cooperation with local car dealer group ASTARA and sold new energy passenger vehicles locally.

BASF currently has relevant production capacity in the United States and Germany. Since the establishment of BASF Shanshan in China in 2021, it has established a closed business loop covering raw materials, cathode material precursors, cathode active materials and waste battery resource utilization. At this stage, BASF Shanshan has four bases in Hunan and Ningxia. By the end of 2022, the ternary cathode production capacity has reached 70,000 tons/year. At the same time, Ningxia Zhongwei also has a 35,000-ton cathode material project under construction. In addition, the company has vigorously increased its emphasis on battery recycling in recent years, and its first priority is cathode materials.

On June 29 this year, BASF just announced the official completion of its first cathode material factory in Schwarzheide, southern Brandenburg, Germany. In addition, BASF has also established a local factory responsible for the commercial production and recycling of "black powder", which is scheduled to be officially put into operation in 2024.

In September this year, BASF also announced that it would cooperate with Nanotech Energy of the United States, American Battery Technology (ABTC) and TODA Advanced Materials Inc. of Canada to realize lithium battery recycling in North America. It is expected to be put into production in 2024. This will make BASF the first company in North America to supply recycled metal cathode active materials on a commercial scale.